National Consumer Disputes Redressal Commission Asks LIC to Pay Claim, Interest to Policy Holder’s Widow, Trashes Plea of Hiding Ailments

Rejecting Life Insurance Corporation (LIC)’s claim that a policy-holder lied about his health condition at the time of purchasing insurance, the national consumer forum has directed the firm to pay Rs 1.5 lakh along with bonus & interest to his widow.

The National Consumer Disputes Redressal Commission (NCDRC) asked Life Insurance Corporation (LIC) to pay the claim amount to Sunita Devi, the widow of policy holder Narendra Kumar Pandey, along with bonus & 9 per cent interest on the amount from 2007, when the complaint was filed.

The commission said in a recent order that there was no plea from the insurance company regarding concealment of any pre-existing disease by Pandey at the time of issuance of the policies.

“In the present case, there is no contention of the Insurance Company that at the time when the 2 insurance policies were taken by the insured, he was suffering with some disease & that he had fraudulently concealed this fact.

“The Respondents (Life Insurance Corporation (LIC)) are hereby directed to give sum assured in the policies & bonus thereon within 2 months along with interest at 9 per cent per annum from the date of filing of the complaint to the date of actual payment to the complainant (Sunita Devi),” said a bench of commission’s presiding member Deepa Sharma & its member C Vishwanath.

Devi’s husband had purchased 2 policies of Rs 1 lakh & Rs 50,000 on Nov 25, 1997, which lapsed due to some monetary problem & was later revived on June 19, 2002. Her husband died on May 24, 2005.

Devi, being his nominee, filed for claim for both the policies.

However, Life Insurance Corporation, approved only Rs 34,300 for the policy of Rs 1,00,000 & Rs 10,750 for the policy of Rs 50,000 on the ground that the insured had concealed the material facts relating to his health at the time of the revival of the policies.

She alleged in her complaint that her husband had undergone a kidney transplantation in the year 2000 for which claim was filed with the insurance company, however, it was rejected stating that kidney transplantation wasn’t covered under the policies.

At the time of revival of the policies, which was done in 2002, the kidney transplantation of Pandey was very well known to the insurance company, Devi said.

The policies were revived after medically examining Pandey & being satisfied about his health condition, she said.

LIC asked to pay for denying claim arbitrarily

A consumer forum has directed the Life Insurance Corporation to pay  Rs one lakh to the husband of a policy holder for ‘arbitrarily’ rejecting his claim for the assured amount on his wife’s death.

The New Delhi District Consumer Disputes Redressal Forum observed that LIC had ‘misdirected itself’ by not showing any evidence that the deceased was suffering from asthma prior to availing the policy and had not ‘applied its mind’ while denying his claim. The LIC had denied the claim saying the woman was an asthma patient and had not disclosed her illness while taking the policy.

It had relied on a discharge summary of 2004 to reject the claim.

“We have considered the material on record and submission made. It is patent that opposite party (LIC) has misdirected itself. It has not brought any evidence of deceased suffering from asthma before taking of policy in 2003 or any record of taking treatment.

“The discharge summary of 2004 is of no use. It shows trouble for 4-5 days in 2004 and not before taking policy in 2003. Opposite party has not applied its mind. We hold it guilty of deficiency in service by arbitrarily repudiating the claim,” according to the bench presided by C.K. Chaturvedi.

It directed LIC to pay the sum insured of Rs 50,000 along with ‘punitive damages’ of Rs 50,000 to Delhi resident Dev Raj whose wife had died in December 2005. The forum also directed LIC to obtain half of the damages from salary of the officer concerned ‘who gave no attention to the appeal and agreed for repudiating the claim’.

Raj, in his complaint, had said that his wife had obtained the policy for Rs 50,000 from LIC in 2003 and under it she was covered till 2005, but the insurance firm had rejected his claim on the ground that she was an asthma patient.

Rejection of claim on”fanciful ground” costs LIC Rs 4L

A consumer court has directed the LIC to pay Rs 4L as LIC has rejected a claim of a widow, a life insurance policy holder, on her husband’s death on a “fanciful ground”.

The New Delhi District Consumer Disputes Redressal Forum ordered the Life Insurance Corporation of India (LIC) to pay the compensation while condemning its act of rejecting the claim and terming its official, who repudiated the claim, as one of “irresponsible mindset.”

 The LIC had rejected the claim on alleged ground of suppression of pre-existing disease, despite having medically examined and cleared the insured before issuing the policy, said the forum.

 “The ground of repudiation had been found from the leave application of deceased in his office. In the application, he took leave due to abscess in cheek, a trivial discomfort, as not any disease. This is alleged as suppression of material fact and pre-existing disease,” said the forum presided by C K Chaturvedi.

 “The rejection on such a fanciful ground is in line with the mindset of irresponsible officials, who think they serve their employer well by harassing consumers. We condemn this act of opposite party (LIC) and holding the LIC guilty of deficiency in service, direct it to pay assured sum of Rs three lakhs for death of the insured,” the bench said.

 The order of the forum came on a complaint by Gurgaon resident Bimla Devi, who had alleged that the LIC had arbitrarily rejected her claim for assured amount after the death of her husband in March 2005.

 She had said that her late husband had bought the life insurance policy from the LIC and had also paid two premiums prior to his death.

 Allowing the woman’s complaint, the bench directed the LIC to pay her the assured amount of Rs three lakh along with Rs one lakh as compensation for her harrasement for seven years that she underwent due to rejection of her claim after her husband’s death.

 “To teach a lesson to the (concerned) LIC official, we direct LIC to deduct 50 per cent of the Rs one lakh from the salary of the officer who okayed the repudiation,” it added.

Consumer Court: Death due to doctor’s negligent act is an accident

Doctor’s rash or negligent act resulting in death amounts to an accident apex consumer panel has held while making the victim entitled to the accidental death benefits from his or her insurer.

 The National Consumer Disputes Redressal Forum (NCDRC) gave the ruling while ordering the Life Insurance Corporation (LIC) of India to pay the accidental death benefits to the husband of the insured, who had died while being operated upon.

 “The life assured (the insured) died during an operation by the treating doctors. Thus, the injury to the life assured was an accident caused by outward, violent and visible means and therefore, the Life Insurance Corporation of India cannot be absolved from its liability to pay the accidental benefits to the complainant,” the NCDRC said.

 The LIC had denied the accidental benefits to Haryana resident Narender Singh, the husband of the insured, saying his wife’s death during the surgery was not an accident.

 It had also contended that the doctors were not negligent or rash as they had performed the surgery fairly without any ill-intention or mens rea.

 The bench presided by Justice J M Malik rejected the contentions as “devoid of force” and pointed out that “a criminal case under section 304-A (of Indian Penal Code) is pending against the doctors. A criminal case crops up by a negligent and rash act. Mens rea is not required.” It also observed “the negligence and rashness” as well as deficiency of service of the doctors was evident from the fact that no anaesthetist was present during the surgery.

 “Without calling the anaesthetist, the doctors should not have treated the patient at all. This itself speaks deficiency in service on the part of the doctors as well as negligence and rashness,” the NCDRC said